Correlation Between Alton Sports and Lotte Rental
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Lotte Rental at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alton Sports and Lotte Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Lotte Rental Co, you can compare the effects of market volatilities on Alton Sports and Lotte Rental and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alton Sports with a short position of Lotte Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Lotte Rental.
Diversification Opportunities for Alton Sports and Lotte Rental
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alton and Lotte is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Lotte Rental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Rental and Alton Sports is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alton Sports CoLtd are associated (or correlated) with Lotte Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Rental has no effect on the direction of Alton Sports i.e., Alton Sports and Lotte Rental go up and down completely randomly.
Pair Corralation between Alton Sports and Lotte Rental
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Lotte Rental. In addition to that, Alton Sports is 1.02 times more volatile than Lotte Rental Co. It trades about -0.07 of its total potential returns per unit of risk. Lotte Rental Co is currently generating about 0.04 per unit of volatility. If you would invest 2,645,000 in Lotte Rental Co on October 14, 2024 and sell it today you would earn a total of 280,000 from holding Lotte Rental Co or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Lotte Rental Co
Performance |
| Timeline |
| Alton Sports CoLtd |
| Lotte Rental |
Alton Sports and Lotte Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Lotte Rental
The main advantage of trading using opposite Alton Sports and Lotte Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Lotte Rental can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lotte Rental will offset losses from the drop in Lotte Rental's long position.| Alton Sports vs. Eagle Veterinary Technology | Alton Sports vs. KMH Hitech Co | Alton Sports vs. Polaris Office Corp | Alton Sports vs. Sewoon Medical Co |
| Lotte Rental vs. Sangsin Energy Display | Lotte Rental vs. Aprogen Healthcare Games | Lotte Rental vs. Seoul Semiconductor Co | Lotte Rental vs. Alton Sports CoLtd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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